Repeal of Health Law Faces a New Hurdle: Older Americans

Image

Represenative Greg Walden, second from right, the chairman of the House Energy and Commerce Committee, one of two House panels planning to vote this week on a bill that would roll back major provisions of the Affordable Care Act.CreditGabriella Demczuk for The New York Times

AARP and its allies are bombarding congressional offices with objections as two House committees plan to vote on the Republicans’ bill this week.

If the law is repealed, the groups say, people in their 50s and 60s could see premiums rise by $2,000 to $3,000 a year or more: increases of 20 percent to 25 percent or higher.

Under current rules, insurers cannot charge older adults more than three times what they charge young adults for the same coverage. House Republican leaders would allow a ratio of five to one — or more, if states choose.

Insurers support the change, saying it would help them attract larger numbers of young customers.

The current rating restrictions, they say, have increased premiums for young adults, discouraging them from enrolling.

But the Republican proposal would “increase the financial burden of older Americans, making coverage significantly less affordable,” says a letter to Congress from the Leadership Council of Aging Organizations, a coalition of nonprofit groups that represent the interests of older Americans.

The letter was addressed to Representative Greg Walden, Republican of Oregon and the chairman of the Energy and Commerce Committee, one of two House panels planning to vote this week on a bill that would roll back major provisions of President Barack Obama’s signature domestic accomplishment.

David M. Certner, the legislative policy director of AARP, said the proposal would have “a severe impact on Americans age 50 to 64 who have not yet become eligible for Medicare.”

At the same time, Mr. Certner said, the Republican proposal could reduce the financial assistance available to help people pay insurance premiums.

Republicans say their proposal would reduce insurance prices by stimulating competition and by allowing insurers to sell a leaner, less expensive package of benefits.

In Mr. Walden’s hometown, Hood River, Ore., for example, the average premium for a midlevel silver plan for a 60-year-old man is $10,500 a year, compared with $3,864 for a 21-year-old man, according to HealthCare.gov, the online federal insurance marketplace.

Many people who buy insurance through the exchanges qualify for subsidies to help defray the cost. But people who buy insurance outside the Affordable Care Act marketplace cannot obtain subsidies.

Republicans in the House and the Senate want to change that, so people can get subsidies in the free market outside the public exchange.

Before the Affordable Care Act took effect, about 40 states allowed insurers to charge older adults five times as much as young adults. This appears to be consistent with patterns of medical spending.

“Average spending among people who are 64 years old is about 4.8 times as high as average spending among people who are 21 years old,” the Congressional Budget Office said last year, citing research by actuaries.

Representative Larry Bucshon, Republican of Indiana and a heart surgeon, said the rating restrictions in the 2010 health law had “led to sicker insurance pools and driven younger, healthier patients away from the marketplace.”

“The argument that the three-to-one ratio saves seniors money may not be true,” Mr. Bucshon said. “In fact, I don’t think it is true. It has just increased costs for younger people.”

Republicans contend that benefit mandates in the health law have driven up insurance costs. The House Republican bill would allow states to define the “essential health benefits” that insurers must provide.

Jerry C. Fleming, a retired health insurance executive who worked at Kaiser Permanente for more than 35 years, said on Sunday that the House Republican plan could produce “breathtaking increases in premiums” for older people with low incomes.

Their share of the premium could, in some cases, more than double, he said.

Another provision of the bill drafted by House Republican leaders has come under fire in recent days.

The bill says that, in providing financial assistance to help people buy insurance, federal officials will verify eligibility using the same “methods and procedures” used by the Obama administration under the Affordable Care Act.

Republicans have repeatedly criticized those procedures as inadequate, saying they verify citizenship but not a person’s identity.

The Government Accountability Office, an investigative arm of Congress, has found the marketplaces “vulnerable to fraud” because they do not adequately check the identity of people applying for financial assistance.

In 2010, just before Congress gave final approval to the Affordable Care Act, the conservative House Republican Study Committee said the verification procedures in the bill were “insufficient and ineffective.”